Lambing percentages are expected to be higher than average.
Lambing percentages are expected to be higher than average.
Opinion
OPINION
There is some cruel irony in that as we continue to rebuild our farms in the wake of last summer’s two cyclones, we are also preparing for drought.
The predicted El Nino weather pattern is already making its presence felt, but it does give us time to consider what management strategies we can put in place to maximise returns from this year’s lamb crop while protecting the future performance of our capital stock.
Ewes went into mating in good condition, and this, coupled with the settled weather over lambing, suggests we are going to see some healthy lamb tallies at docking.
Beef + Lamb New Zealand’s (B+LNZ) Economic Service reports lambing percentages are expected to be higher than average across most farm classes.
Beef + Lamb New Zealand director Patrick Crawshaw.
This is the one positive from the service, which is forecasting sheep and beef farm profitability to be at an eight-year low.
Based on data gathered from farms surveyed by the Economic Services, the 2023-2024 forecast farm profitability before tax is $88,600 (a weighted average across all farm classes). This is almost $40,000 back from the previous season and $100,000 back from the highs of 2021-2022.
The biggest driver behind this drop in farm profitability is high input prices.
The last time costs as a percentage of gross farm revenue were this high was back in 2005-2008. This has pushed farm expenditure up by 3 per cent on last year and up 16 per cent from 2020.
Lamb prices are likely to be flat for the coming season, although beef prices are relatively good, so depending on the mix of stock classes, these may help buffer lamb prices.
Timing of sales and exchange rates will also influence income, but B+LNZ’s Economic Service says overall, farmers will have less money in their pockets this season.
I was part of a recent farmer panel for one of B+LNZ’s recent Sow Grow Thrive webinar series. If you didn’t join any of these webinars, I strongly encourage you to find the resulting podcasts on B+LNZ’s Knowledge Hub.
They include a wealth of information about navigating what could be a challenging season. The takeaways from the one I was involved with, “Bouncing baa-cckk from tough times”, included focusing on the factors you can control, building strong relationships with those involved in your farm business, making a plan, keeping a close eye on both financial and feed budgets, and considering ways you can make incremental gains financially.
Go through farm inputs line by line and consider where small savings can be made. They all add up.
Use this season as an opportunity to cast a critical eye over your farm system and instil business disciplines that will stand you in good stead when we recover.
The expression “never waste a good crisis” comes to mind, and the refinements we put in place now will benefit our businesses when we move into an up cycle.
Most importantly, look after your own mental and physical wellbeing. Get off the farm, meet up with friends and keep talking. We are all in this together.
This editorial was first published in the Hawke’s Bay Today Ram Catalogue 2023.
